Maxine Waters Seeks Transparency on Kraken’s Federal Reserve Account Approval
U.S. Representative Maxine Waters, the top Democrat on the House Financial Services Committee, is pressing the Federal Reserve Bank of Kansas City for detailed information about its decision to grant a limited-purpose master account to Kraken Financial. In a letter sent Thursday, Waters requested a response by April 10 from Kansas City Fed President Jeff Schmid.
The letter outlines several key questions. Waters asks for clarity on what the approval means in practice, which specific Federal Reserve services Kraken can now access, and what conditions or restrictions apply to that access. She also seeks information on what anti-money laundering (AML) and consumer protection measures were evaluated during the approval process.
This request follows the Kansas City Fed’s announcement earlier this month that it had approved Kraken’s application. The move is widely viewed as a significant milestone for the cryptocurrency industry, as several crypto-focused U.S. firms have sought similar direct access to the Federal Reserve’s payment systems for years.
The Significance of a Limited-Purpose Master Account
A limited-purpose master account provides a financial institution with direct access to Fedwire, the Federal Reserve’s real-time gross settlement system. This access allows entities to move funds on the same core payments rails used by traditional banks and credit unions, potentially improving efficiency and reducing reliance on intermediary banks.
In her letter, Waters noted that the Kansas City Fed’s public announcement did not disclose specifics about Kraken’s service access, citing the confidentiality of applicant business information. She argued that answers to her questions are “critical to ensuring that the process of approving Federal Reserve Bank account access is conducted consistently with the law, with impartiality, and in a manner that continues to foster a safe and efficient payment system.”
Waters Cites Broader Regulatory and Consumer Protection Concerns
The California representative framed her inquiry within a larger context of regulatory gaps. She wrote that innovations in payments, digital assets, and tokenization are “rapidly outpacing statutory frameworks developed to mitigate risk, promote competition, and protect consumers in a traditional financial environment.”
“Given this environment, much is required of those who exercise discretionary authority over safe access to, and operation of, our nation’s critical financial infrastructure,” Waters stated. She contended that full transparency and a clear legal basis are necessary to manage any associated risks from granting a crypto-adjacent firm access to the central bank’s payment network.
Context: Other Crypto Firms Pursue Fed Access
Kraken is not alone in this pursuit. Other notable crypto-related entities that have applied for or sought similar master accounts include Custodia Bank, founded by Caitlin Long, which filed a court petition in late 2025 to challenge the Fed’s denial of its application. Anchorage Digital Bank, a federally chartered digital asset bank, applied for an account last year. Ripple has also pursued access through its subsidiary, Standard Custody & Trust Company.
Waters’ Track Record on Crypto
Waters’ request is consistent with her established skeptical stance on cryptocurrency. The crypto advocacy group Stand With Crypto maintains a political scorecard rating U.S. lawmakers based on their public statements and votes. The group classifies Waters as “strongly against crypto,” citing five statements and six votes against crypto-friendly legislation, including the Digital Asset Market Clarity Act and the GENIUS Act.
Her scrutiny extends to other regulators. Last year, she called for a hearing with then-Securities and Exchange Commission Chair Gary Gensler (now succeeded by Paul Atkins), expressing concerns about the agency’s approach to crypto enforcement cases.
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